PGNiG revenues surge on increased gas sales in H1
Revenues at Poland's state-owned gas supplier PGNiG rose 19% year on year to 25bn zlotys ($6.6bn) in the first half of 2021, thanks to a surge in gas sales, the company said on September 2.
Gas sales volumes increased 8% yr/yr to 18.2bn m3, PGNiG said, attributing the growth to colder weather early in the year that led to higher demand for heating, as well as economy recovery in the second quarter. High international gas prices also resulted in a 61% hike in PGNiG's operating expenses to 21.6bn zlotys, however. PGNiG's biggest supplier is Russia's Gazprom, although it also imports LNG.
Despite the bump in revenues, PGNiG's Ebitda contracted by 44% to 5.2bn zlotys, while Ebit fell 55% to 3.4bn zlotys. The company attributed these declines to the $1.5bn fee that Gazprom had to pay PGNiG last year for overpricing its gas supplies under a ruling by a Swedish arbitration court. Omitting the Gazprom payment, PGNiG said its Ebitda and Ebit would have increased by 17% and 25% respectively.
PGNiG earned 53% of its Ebitda in the first half from its upstream operations, versus only 3% in the corresponding period of 2020, reflecting higher prices for oil and gas. In zlotys, the average price of Brent crude shot up 49% yr/yr in the six-month period, while average day-ahead gas prices on the Polish power exchange soared 159%. A 7% decline in PGNiG's oil production to 608,000 metric tons was offset by a 7% growth in gas output to 2.34bn m3, on the back of increased flow in Norway and Pakistan.
"During the year, the prices of natural gas rebounded from all-time lows to all-time highs," PGNiG president Pawel Majewski commented. "Despite the rapidly changing market environment, the PGNiG group was able to maintain business stability and performance. This is the effect of diversifying our operations, which includes both hydrocarbon production and trade, supported by the generation and distribution segments."
PGNiG's distribution business accounted for 30% of Ebitda, compared with 13% in the first half of 2020, while the contribution of its generation segment doubled to 12%. Meanwhile the share of trade and storage operations shrank to just 5%, from 81% a year earlier.
PGNiG also announced on September 2 a deal to expand future US LNG shipments from Venture Global. On August 30, it agreed to acquire a majority stake in a gas permit in west Ukraine, in another move to reduce its reliance on Russian gas.